Capital pounds the Scottish Beat

The station first went on air last November

Capital Radio has strengthened its position in Scotland by paying £33.7m for a radio station which has yet to make a profit.

The take-over of Beat 106 is reported to be earning millions for its founders and shareholders, who include television presenter Carol Smillie, footballer Ally McCoist and singer Sharlene Spiteri.

Beat 106, which is aimed at 16 to 24-year-olds, started broadcasting last November across central Scotland and has an estimated audience of 2.6 million listeners.

Carol smiling all the way to the bank

The station was set up by Glasgow businessman Ron McCulloch, of Big Beat Holdings, and T in the Park music festival promoter, Stuart Clumpas.

There have been reports that the initial outlay for Beat 106 was £2m, meaning the sale to Capital will net shareholders £31m.

The three main celebrity names with an interest in Beat are said to be in line for about £1m each.

Capital's rival, Chrysalis, was in the running at one point with a £28m bid but pulled out when the stakes became too high.

Ally McCoist: Scored with investment

In a statement, Capital said the purchase of Beat, coming after its victory in the fight to buy Border TV and its radio stations in April, was "an important step" towards its strategy of achieving a national presence.

Chief executive David Mansfield said: "The Beat acquisition has further strengthened Capital's strong position in UK radio, building on the acquisition of Border's Century stations.

"Our leading position, in both analogue and digital radio and the development of our new websites, mean the company has an extremely bright future ahead of it."

The take-over of Beat will give Capital the potential to broadcast to some 58% of the UK's adult population.

It will provide the London-based media group with a base in Scotland from which to operate its new digital Xfm stations, both of which will be on air this year.